Employment in the

Global Knowledge
Society
Garry Jacobs
World Academy of Art & Science

1
Myths about Employment
Population growth creates unemployment
Technology destroys jobs
Globalization generates unemployment
Rising levels of unemployment are
inevitable

2
 Population & Employment 1950 - 2000
Population & Employment 1950-
6
6
2000
5

140%
4
Billion

2.5 2.7
2 200%

1
0.9
0

1950 2000 3
 Population Growth &
Employment 1994 2004
Population grew by 763 M (14%)
Employment grew by 400 M
(17% )
Job creation is at record rates
Shift from manual to mental work has
resulted in a dramatic improvement in
the quality of jobs created
4
 Unemployment 1994 -- 2004
Unemployment rose from 140 M to 180 M (21%)
6% of global labor force of 3 B unemployed
Labor force participation rose 1.5% resulting in
an additional 90 M job seekers since 1990
largely due to more working women and delayed
retirement of the elderly

5
Youth Unemployment (under 25)
Unemployment is concentrated among youth
& in cities
Youth are entering workforce faster than job
creation due to high pop growth in 1970-80s
Youth UE: USA 11%, France 28%, Croatia
37%, Spain 50%, World 14%
Mismatch between education, training & jobs
6
 Impact of Aging on Employment
Significant labor and skill shortages will develop
in OECD countries
Working age population is declining in OECD
countries -- 8% in EU25 by 2030 could result
in labor shortage of 70-150 M in EU15.
Labor shortages by 2020: USA 17M, China 10M
Will propel massive migration of people and jobs

7
Impact of Technology
Technological development results in
localized direct low-wage job destruction in
labor-intensive sectors and invisible indirect
job creation in many other sectors.
Technology is stimulus to higher wage
indirect job creation in machine production,
R&D, education, services with multiplier
effect from higher incomes & consumption.
US labor force grew from 29 M to 130 M in a
century of rapid technology adoption.
8
Invisible Job Creation: Computers
Computer research, design and manufacturing
Same for peripherals & allied products
Software design, engg, servicing, maintenance
Making and selling computer games
Electronics retailers
Computer training companies
Web publishing, e-commerce, other web
businesses
Self-employment web-based & other
Recycling old computers 9
Globalization
Does transfer jobs from high cost to low
cost locations, causing disruptions.
Offset by higher purchasing power at home
& reciprocal demand from abroad.
High labor costs alone is not the cause of
job destruction. US labor costs were 10
times higher than Europe in the late 19th
Century. Total productivity of the economy
is the key, i.e. application of Knowledge.

10
Global Shortage of Skills, not Jobs
USA has shortfall of 126,000 nurses & estimates shortfall of
200,000 MDs & 800,000 nurses by 2020.
In Germany, 80% of enterprises with fewer than 20
employees reported difficulties in filling positions.
In Austria, 42% of enterprises face skilled-labor shortage.
50% of firms in developing countries face skills shortage.
Mismatch between skills & jobs due to little or inappropriate
education & training
Only 5% of India workforce have formal vocational training
11
Natural Employment Generation
Average person works only 1/3rd of
lifetime but requires goods and services
3/3rds
Since the providers of those goods and
services also work only 1/3rd of their
lifetime, the ratio of working lifetime
contributed to working lifetime required
of others = 1:9 12
Fractional Job Creation
School going child creates fractional jobs
for
Teachers & school administrators
Authors, printers, publishers
Medical care providers & researchers
Garment makers
Toymakers
Farmers & food processors
Retail store & restaurant staff
13
Structural Unemployment
Symptom of the artificial functioning of
the society hindered by its structures
9% in Europe
5.6% in USA

14
How society stimulates employment

New products Higher quality standards

New services Legislation & enforcement
Growth in demand Administrative efficiency
Higher productivity Health consciousness
Entrepreneurship Environment awareness
Access to information Higher skills
Technological innovation Increased speed
Organizational innovation Change of attitudes

15
Job Creation in India
7 M new job seekers annually
No significant rise in unemployment
Only 8% of jobs in formal sector
Little information on where & how jobs
are created in informal sector
Process of job creation poorly
understood
Strategy to create 10 M jobs per year
Indian Employment Guarantee Act 2005
16
Job Creation Strategies
Publicize opportunities in the media -- knowledge
Remove structural impediments & disincentives
Increase access to credit
Incentives for new initiatives
Strengthen or enforce legislation
Impart training (computer-based)
Use insurance as a stimulus
Promote entrepreneurship & self-employment
Promote new organizations
Raise minimum levels of education
Create purchasing power (money)
17
Need for Further Research
Natural process of job creation
Project occupation demand
Project skills requirements

18
Conclusions
Now is not the time for fatalism or complacency.
Full employment is an achievable goal.
Knowledge, education, training & human values
such as freedom & respect for the individual are
the keys.
Right to employment should be guaranteed.
The nation that guarantees it will achieve it.
Future of Employment is in our hands.
19